2017 Annual Report France Schlumberger Limited 5599 San Felipe Houston, Texas 77056 United States

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14781schD1R2.indd 1 2/15/18 9:13 AM Board of Directors Corporate Officers

Peter L.S. Currie 2, 4 Paal Kibsgaard Claudia Jaramillo Form 10-K President, Currie Capital LLC Chairman and Chief Executive Officer Vice President and The Schlumberger 2017 annual Palo Alto, California Treasurer report on Form 10-K filed with Simon Ayat the Securities and Exchange V. Maureen Kempston Darkes 1, 3 Executive Vice President Vijay Kasibhatla Commission is available without Former Group Vice President and Chief Financial Officer Director Mergers and charge. To obtain a copy, call General Motors Corporation Acquisitions (800) 997-5299 within North Detroit, Michigan Alexander C. Juden America and +1 (813) 774-5043 Secretary and General Counsel Guy Arrington outside North America. Paal Kibsgaard Vice President Operations Planning Alternatively, you can view and Chairman and Chief Executive Officer Ashok Belani and Resource Management print all of our SEC filings online Schlumberger Executive Vice President Technology at www.slb.com/ir or write to: Saul Laureles Vice President Investor Relations Nikolay Kudryavtsev 1, 3, 5 Jean-François Poupeau Director Corporate Legal and Schlumberger Limited Rector Executive Vice President Corporate Assistant Secretary 5599 San Felipe, 17th Floor Moscow Institute of Physics Engagement Houston, Texas, 77056. and Technology Eileen Hardell Moscow, Russia Patrick Schorn Assistant Secretary Duplicate Mailings Executive Vice President When a stockholder owns shares Helge Lund 1, 3 New Ventures Corporate Information in more than one account, or when Former Chief Executive Officer stockholders live at the same BG Group plc Aaron Gatt Floridia address, duplicate mailings may President Western Hemisphere Stockholder Information result. If you receive duplicate Michael E. Marks 1 Schlumberger’s common stock reports, you can help eliminate the Managing Partner Khaled Al Mogharbel is listed on the New York Stock added expense by requesting that Riverwood Capital, LLC President Eastern Hemisphere Exchange, trading symbol “SLB,” only one copy be sent. To elimi- Palo Alto, California and on the Euronext Paris, London, nate duplicate mailings, contact Stephane Biguet and SIX Swiss Stock Exchanges. Computershare Trust Company, Indra K. Nooyi 1, 2 Vice President Finance N.A., Stock Transfer Agent and Chairman and For quarterly earnings dividend Registrar. Chief Executive Officer Pierre Cheréque announcements and other informa- PepsiCo Vice President and Director of Taxes tion, please call (800) 997-5299 Nonprofit Community Purchase, New York from the United States and Canada, Development Programs Stephanie Cox or +1 (813) 774-5043 outside Schlumberger supports and Lubna S. Olayan 3, 4 Vice President Human Resources North America. You may also visit encourages a range of community Chief Executive Officer www.slb.com/ir. development programs—both local Olayan Financing Company Catherine MacGregor and global—many of which are Riyadh, Saudi Arabia President Drilling Group Stock Transfer Agent supported by employee volunteers. and Registrar We have chosen to focus on Leo Rafael Reif 2, 4, 5 Hinda Gharbi Computershare Trust Company, N.A. science, technology, engineering, President President Reservoir P.O. Box 30170 and mathematics (STEM) education Massachusetts Institute Characterization Group College Station, Texas 77842 and community health and safety. of Technology Cambridge, +1 (877) 745-9341 To learn more about these programs, Financial Performance Massachusetts Olivier Le Peuch +1 (781) 575-2707 please see the latest edition of the President Cameron Group Schlumberger Global Stewardship (Stated in millions, except per-share amounts) Tore I. Sandvold 3, 4 For Overnight Delivery: Report at www.slb.com. Year ended December 31 2017 2016 2015 Executive Chairman Abdellah Merad Computershare Trust Company, N.A. Sandvold Energy AS President Production Group 211 Quality Circle, Suite 210 World Wide Web Revenue $ 30,440 $ 27,810 $ 35,475 Oslo, Norway College Station, Texas 77845 For information on Schlumberger Net income (loss) attributable to Schlumberger $ (1,505) $ (1,687) $ 2,072 Imran Kizilbash +1 (877) 745-9341 technology, services and solutions, 3, 4, 5 +1 (781) 575-2707 visit www.slb.com. For information $ (1.08) $ (1.24) $ 1.63 Henri Seydoux Vice President Schlumberger Diluted earnings (loss) per share Chairman and Venture Fund on career and job opportunities Cash dividends per share $ 2.00 $ 2.00 $ 2.00 Chief Executive Officer General stockholder at Schlumberger, visit Cash flow from operations $ 5,663 $ 6,261 $ 8,805 Parrot S.A. Simon Farrant information is available on www.careers.slb.com. Paris, France Vice President Investor Relations the Computershare website at www.computershare.com. * Mark of Schlumberger Miguel Galuccio 3, 5 Howard Guild Other company, product, and service names are the properties of their respective owners. Safety Performance Chairman and Chief Accounting Officer E-mail Alerts Chief Executive Officer To receive Schlumberger press 2017 2016 2015 Photography by John Hafemeister and Gary Year ended December 31 Vista Oil and Gas Kevin Fyfe releases and daily news, Ranos (cover, 3c, 13a); Stuart Conway (inside Combined Lost Time Injury Frequency (CLTIF)—Industry Recognized 0.90 0.90 0.95 Mexico City, Mexico Vice President sign up at www.slb.com/ir. front cover); Robert Seale (3a); Ken Childress Controller Operations (3d, 9); John Hafemeister (12); Ragnar Auto Accident Rate mile (AARm)—Industry Recognized 0.34 0.25 0.21 1 Member, Audit Committee Vikoeren (16). 2 Member, Compensation Committee 3 Member, Finance Committee 4 Member, Nominating and Governance Committee 5 Member, Science and Technology Committee

14781schD1R2.indd 2 2/14/18 5:18 PM Schlumberger is the world’s leading provider of technology for reservoir characterization, drilling, production, and processing to the oil and gas industry.

Working in more than 85 countries and employing approximately 100,000 people who represent over 140 nationalities, Schlumberger supplies the industry’s most comprehensive range of products and services, from exploration through production, and integrated pore to pipeline solutions that optimize hydrocarbon recovery to deliver reservoir performance.

Front Cover Contents Digital technology is helping the E&P industry make better Financial and Safety Performance Inside Front Cover use of all the data and expertise it possesses by getting the right 2 Letter to Shareholders information to the right people at the right time. Engineers will 5 Performed by Schlumberger be able to use digital well construction planning and operations 6 Digital Technology Integration software in the DELFI* cognitive E&P environment to enhance 8 Establish a New Way of Working collaboration and optimize the drilling process. For example, 8 System-Level Optimization the DrillPlan* digital well construction planning solution 11 Reduce Uncertainty, Accelerate Decision Making provides a new way of working for drilling engineers in the field 11 Increase Efficiency, Minimize Risks collaborating with domain experts at remote monitoring centers. 13 Decrease Cost per Barrel Inside Front Cover 16 Digitally Enable End-to-End Solutions The sun sets on an Integrated Production Services well 17 Annual Report on Form 10-K intervention plug and abandonment operation in Brunei. Directors, Officers, and Corporate Information Inside Back Cover

14781schD2R3.nar.indd 1 2/13/18 11:18 PM Letter to Shareholders

In 2017, Schlumberger celebrated the 90th anniversary of the first well logging survey, which took place in the Pechelbronn oil field in France in September 1927. This log established the science of subsurface metrology and provided the impetus for the business venture that eventually became Schlumberger. Paal Kibsgaard Chairman and Chief Executive Officer

Schlumberger full-year 2017 revenue of $30.4 billion increased 9% year on year. This reflects a full year of activity from the acquired Cameron businesses compared with only three quarters of activity in 2016. In addition to the impact of Cameron, revenue growth was driven by unconventional land resource developments in North America due to the recovery in activity combined with market share gains and improved pricing as the oil and gas industry began to emerge from the longest and deepest downturn in 30 years.

Following two successive years of E&P investment cuts, operators increased their upstream spend in North America by more than 30% in 2017. The increase in oil price afforded by the OPEC agreement gave US producers a means to increase their investment in tight oil. However, apprehension related to growing US supply, and uncertainty surrounding the duration of OPEC- and Russia-led production cuts held international spending to a level 3% below 2016.

During 2017, the outlook improved for international markets, evidenced by a significant increase in the sanctioning of new projects. The number of final investment decisions tripled in 2017 compared with 2016, with 75% of the new projects planned for shallow and deepwater offshore environments.

After starting the year at $55 per barrel, Brent prices fell to $44 in June and then recovered to $67 by the end of the year. The price increase resulted from 2017 demand growth of 1.5 million barrels per day and strong adherence to a production agreement between OPEC and Russia, which served to reduce oil production by an average of 1.6 million barrels per day compared with the fourth quarter of 2016. Strong demand and restricted supply accelerated the depletion of stocks as the year progressed. By September, OECD crude and product stocks had returned to 2015 levels.

As the oil market began to rebalance in 2017, replacement of conventional oil reserves remained a challenge. In 2017, discoveries were at an all-time low due to lower exploration activity, and more than 60% of discovered resources were gas. Oil discoveries accounted for only 3.4 billion barrels—while about 30 billion barrels of conventional oil is produced each year—representing a reserves replacement ratio of only 11%.

In the natural gas markets, low Henry Hub prices and flat domestic consumption allowed the US to transition from importer to exporter of natural gas for the first time since 1957, and Liquefied Natural Gas was the enabler. Global LNG trading increased 11% year on year driven by demand in Asia. LNG supply growth was also strong, with the addition of six new liquefaction trains in 2017. In today’s well-supplied market, both producers and consumers are reluctant to invest in new projects. While the short- term market outlook remains challenged, strong longer-term demand growth signals a future need for new LNG supply capacity.

14781schD2R4.nar.indd 2 2/14/18 3:05 PM Schlumberger financial performance in 2017 was driven by land activity in North America, where revenue increased over 80% in line with the average rig count increase. Continued expansion of the Schlumberger hydraulic fracturing presence in North America resulted in additional fleet redeployments, which benefited the Production Group. Drilling Group revenue in North America land increased due to the continuing high demand for longer horizontal lateral sections in shale oil wells. Increased Cameron Surface and Drilling Systems product sales and services also contributed to the strong financial performance in North America. North America revenue, including offshore, grew 42% year on year.

International revenue decreased 2% compared with 2016. This decline was driven by soft demand for exploration- and development-related products and services as E&P budgets remained tight. Activity in Latin America decreased due to the Schlumberger decision to align operations with cash collections in Venezuela. Robust activity in the Middle East and Russia, driven by integrated drilling and production projects, as well as an additional quarter of activity from the acquired Cameron businesses partially offset these decreases.

During the past three years of unprecedented market downturn, Schlumberger has proactively sought to strengthen its technology offering and presence in key markets around the world. The most recent example is the expansion of its hydraulic fracturing presence in North America land through the purchase of the US fracturing and pumpdown perforating businesses from Weatherford. In line with the challenging business environment, over the same period Schlumberger has restructured all relevant parts of the company in terms of both size and organizational structure to maximize its market competitiveness and operational agility.

With the significant changes seen in customer priorities and buying habits in recent years, Schlumberger has continued to evaluate the present and future return prospects for all of its product lines as it seeks to maximize its long-term financial performance. Based on this in-depth analysis, Schlumberger identified the seismic acquisition business as the only product line that does not meet Schlumberger return expectations going forward, even after factoring in an eventual market recovery. Schlumberger has, therefore, taken the difficult decision to exit the marine and land seismic acquisition market and instead operate the WesternGeco product line as an asset-light business, built on its leading position within multiclient, data processing, and geophysical interpretation.

Looking at the oil market, the strong growth in demand is projected to continue in 2018 on the back of a robust global economy. On the supply side, the extension of the OPEC- and Russia-led production

14781schD2R3.nar.indd 3 2/13/18 11:18 PM cuts is already translating into higher-than-expected inventory draws. In North America, 2018 shale oil production is set for another year of strong growth as the positive oil market sentiments will likely “Schlumberger financial increase both investment appetite and availability of financing. At the performance in 2017 was driven same time, the production base in the rest of the world is showing fatigue after three years of unprecedented underinvestment. The by land activity in North America, underlying signs of weakness will likely become more evident in the coming year as the production additions from investments made in where revenue increased over the previous upcycle start to noticeably fall off. Taken together, this means the oil market is now in balance and the previous over-supply 80% in line with the average discount is gradually being replaced by a market tightness premium, which makes Schlumberger increasingly positive on the global outlook rig count increase.” for its business.

This year, new technology sales from all Groups contributed to 24% of total sales, which is a 4% increase over the previous year. The Schlumberger commitment to developing innovative technology included commercialization of key technologies such as the DELFI cognitive E&P environment, which enables collaboration across E&P teams and leverages the full potential of all available data and science to optimize assets; DrillPlan digital well construction planning solution, the first application in the DELFI environment; and Lift IQ* production life cycle management service that provides monitoring, diagnostics, and optimization of artificial lift systems in real time.

One measure of our health and safety performance held steady as our combined lost time injury frequency was the same as 2016. Although Schlumberger maintains a constant focus on safety, our auto accident injury rate deteriorated slightly compared with 2016. Regretfully, we suffered one driving-related fatality in North America involving a contractor. We will continue to guard against the risks that road journeys present by seeking continuous improvement of the measures we have in place to keep our people safe through our global network of Journey Management Centers.

Over the last few years, our transformation efforts have resulted in the design of a new way of working through which our operational processes have been reengineered and our product lines and GeoMarket* organizations restructured. In 2017, we completed the first deployment phase of our SAP-based IT system in North America and continued to see service delivery efficiency gains due to improved resource planning and delivery and reliability-centered asset engineering, manufacturing, and maintenance. This new way of working at Schlumberger is a comprehensive program of change that is being systematically deployed around the globe.

This year also marked the third release of the Schlumberger Global Stewardship Report, the results of which are filed with seven major environmental, social, and governance (ESG) rating agencies. The report details our ESG program, the seeds of which began with initiatives launched nearly 20 years ago.

We believe that the oil market is now in balance as the previous oversupply discount is gradually being replaced by a market tightness premium. We expect to see increases in E&P investment in the main producing regions around the world to replace production that has been lost because of natural decline.

On behalf of Schlumberger people around the world, I want to thank our stakeholders for their confidence and support. I also want to personally thank our employees for their dedication and commitment.

Paal Kibsgaard Chairman and Chief Executive Officer

14781schD2R3.nar.indd 4 2/13/18 11:18 PM Performed by Schlumberger

Schlumberger people have a steadfast commitment The Achieving Excellence: The Longest Well Ever team received the to customers, innovative technology, safety, and quality. Performed by Schlumberger Award from Chairman and CEO Paal Kibsgaard We are people who thrive on the challenge to excel in (far left) and Senior VP of Marketing & Technology Justin Rounce (third from left). Also pictured, from the left, Jon Acquaviva, Dmitriy Kofman, our quest to exceed expectations. In 2001, the company Sheldon Rawlins, Jimmy Varughese, Danil Zazulya, Catherine MacGregor, established the Performed by Schlumberger program to and Richard Brown. recognize projects and their team members who have demonstrated exceptional levels of teamwork, innovation, This set a new benchmark for extended-reach drilling that exceeds and business impact for Schlumberger and its customers. the previous record by 4,921 ft. Historically, new drilling records have been characterized by incremental gains in measured depth, In 2017, 444 projects competed for the Chairman’s Award. and this new benchmark was achieved in a technically challenging As the program’s highest honor, the award recognizes one subarctic, frontier environment. project as an outstanding example of the company’s core values: our people, our commitment to technology, and our The Sakhalin Extended-Reach Drilling Center of Excellence integrated determination to produce superior profits. the domain expertise and technology from 10 Schlumberger product lines and worked closely with the Sakhalin-1 Consortium The team for the Achieving Excellence: The Longest Well Ever during the two years it took to plan and drill this well in the Chayvo project won this year’s Chairman’s Award for its work with field—with drilling completed in 103 days. This successful collaboration the Sakhalin-1 Consortium to drill a 49,212-ft extended-reach achieved a 37% increase in the rate of penetration compared with well on the Orlan Platform offshore Sakhalin, Russia. the previous extended-reach drilling record from 2015.

14781schD2R4.nar.indd 5 2/14/18 4:26 PM Digital Technology Integration

Digital enablement is revolutionizing many industries, yet its adoption by the E&P industry has been limited to date. Today, digital enablement permeates everything Schlumberger does—from research and engineering, manufacturing, operations, and maintenance to resource planning.

Building on our domain expertise and our leadership in hardware and software, Schlumberger is also developing new software and a digital foundation that removes barriers between disciplines to create seamless digital workflows for all E&P domains. This new software moves beyond incremental change—it represents a new way of working that provides new opportunities, unmatched performance, and a step change in efficiency.

Schlumberger is already capitalizing internally on the value unlocked by digital enablement. In addition, value from new digital workflows will be increasingly shared between Schlumberger and its customers as we commercialize new technologies and further enable existing products and services.

Advanced computational capabilities in the DELFI cognitive E&P environment are used to predict well production profiles in the Petrel* E&P software platform.

14781schD2R3.nar.indd 6 2/13/18 11:18 PM 14781schD2R3.nar.indd 7 2/13/18 11:18 PM Establish a New Way of Working Over the last three years, Schlumberger has created technology centers that innovate within the rapidly In a medium-for-longer oil price environment, increased evolving world of digital technology and automation. demand for oil requires investment in technology and business In line with our long history of working with research and models that will improve efficiency and enable unprecedented engineering partners, these centers have formed strong levels of integration and collaboration. The development relationships with an extensive network of leading digital of digital technology is disrupting the traditional way of working technology companies, creating building blocks of expertise in the oil and gas industry and creating a step change in in areas such as cloud technology, data analytics, machine operational and business performance for both Schlumberger learning, artificial intelligence, robotics, and automation. and its customers. Through this ecosystem of extended knowledge, Schlumberger Although digital technology has been integrated into nearly now has deeper access to the best and most advanced digital every facet of our personal lives, its adoption in the E&P technologies and capabilities available today. Together with industry has been limited. The industry’s traditional way of our partners, we are developing the solutions we believe will working presents barriers to the sharing of data and technical meet the industry’s needs. knowledge among the domain experts who make important decisions directing the discovery and development of oil and gas System-Level Optimization resources. Integrating digital technology into E&P workflows requires extensive domain expertise about the entire system— Although data is at the center of E&P development, some from hardware and software technologies to the complexity exploration wells fall short of their objectives as a result of the data and numerous systems involved. To tackle this of unexpected geology or unanticipated hazards. Increasing the challenge, Schlumberger has the domain expertise and global volume and quality of accessible data equips the E&P industry experience in every step of the E&P process, a knowledge that to make better-informed decisions that reduce subsurface risk, stems from our focus on the science of subsurface measurement optimize production, and maximize recovery—but only if that since the company’s foundation. data is efficiently managed.

In addition, the current medium-for-longer oil price environment Petrotechnical experts working on exploration projects demands a new approach for the E&P industry. This new approach spend more than half of their time finding and preparing requires a system-level view to fully optimize the finding, the data they need to make their decisions. The subsequent development, and production of new oil and gas resources as well data interpretation is also very time consuming, and these as the operation of existing oil and gas fields. Innovation around interpretations drive important decisions for the reservoir’s a single element of the E&P development chain cannot maximize development plan. efficiency if done in isolation. The new approach requires a complete understanding of what each element contributes to Changing the way the industry works begins with a critical the entire chain. Schlumberger believes that achieving this will assessment of how the data is used across reservoir require a profound change in the way the industry operates and characterization, well construction, and field production. interacts—changing the way we work and yet also changing the During the development process as it is practiced today, very nature of that work. different types of data exist in silos, making holistic analysis impossible. Without a system approach, precious information Achieving change entails a new collaborative mindset, end- and time are lost because the lack of interface among different to-end systems knowledge, and redesigned business models systems makes it difficult to share localized knowledge. that firmly establish and support new ways of working based on innovative technology and domain expertise. The DELFI cognitive E&P environment was developed to enable a new way of working. As the first of its kind in the oil and gas industry, this secure, cloud-based environment “Over the last three years, Schlumberger has harnesses data, scientific knowledge, and domain expertise to fundamentally change the industry’s way of working. The created technology centers that innovate new DELFI environment makes applications and workflows accessible to every user. Gone are the impenetrable silos, within the rapidly evolving world of digital because in the DELFI environment, every stakeholder can build technology and automation. common workspaces for data, models, and interpretations while ” respecting proprietary information boundaries.

14781schD2R3.nar.indd 8 2/13/18 11:18 PM A geophysicist working in the DELFI environment selects data from different sources in the E&P Data Lake by searching its global multiclient library. By visualizing integrated data models, the geophysicist can enhance his understanding of the subsurface in a specific area of interest.

The DELFI environment provides the best possible at the lowest cost per barrel. This environment facilitates a new representation of the surface and subsurface, including existing level of integration among the geophysics, geology, reservoir wells and facilities, plus those that are planned. The outcome engineering, drilling, and production domains. There are many is shared insight among all users and among all stakeholders workflows throughout exploration and production, and a digital to eliminate the silos of today. Performance is boosted as approach accelerates access to all the available data. For that time cycles are compressed across the business, uncertainty reason, the DELFI environment is also an open and extensible in planning is reduced through greater understanding, and system in which Schlumberger customers and software partners new opportunities are created to extend domain science can add their own intellectual property and workflows. into drilling and production operations. Everything working together enhances business value for both Schlumberger and Schlumberger is an early adopter of HPC, and the teams at its its customers. technology centers—Menlo Park, California; Houston, Texas; Gatwick, UK; and Mumbai, India—have been leading the When Schlumberger launched the DELFI environment, the application of HPC for seismic processing. Today, Schlumberger company deployed an E&P Data Lake on the Google Cloud has a state-of-the-art HPC infrastructure on the cloud that Platform, which includes more than 1,000 3D seismic surveys, runs thousands of central processing unit (CPU) and graphics 5 million wells, 1 million well logs, and 400 million production processing unit (GPU) nodes, and it is the largest cloud records from around the world. This Data Lake makes data from computer cluster of its kind in the oil and gas industry. Cloud- different sources available through a common interface, making based HPC creates new opportunities for advanced visualization it easier for users to discover what the data is, have access to it, and machine learning to enhance the value of oil and gas and use it to maximum advantage. As they work with this vast data assets. amount of information in the cloud, the result is a step change in scalability and performance. But how exactly does the DELFI environment change not just the way of working but also the nature of work? The answer is by The DELFI environment leverages data analytics, machine enabling working in a common environment as well as creating learning, high performance computing (HPC), and the Internet accessibility and augmented intelligence for information of things (IoT), all of which work together to maximize sharing. Data is delivered to the right people at the right time so operational efficiency and deliver optimized production all recipients can maximize use of the latest information based

14781schD2R3.nar.indd 9 2/13/18 11:18 PM on their role and expertise. Barriers to effective communication Schlumberger has been providing are eliminated, improving efficiency during the process so “ domain experts can spend more time on high-level solutions to secure commercial software, the unique challenges every reservoir presents. Decisions that used to take days can now be completed in minutes. information management, and The advancement of digital technology enablement within the IT infrastructure across the entire oil and gas industry sets new demands in terms of cybersecurity. Schlumberger has been providing secure commercial software, E&P life cycle for 35 years.” information management, and IT infrastructure across the entire E&P life cycle for 35 years. In 2015, Schlumberger goals and expand their sphere of contact to other intellectually obtained Service Organization Controls 2 (SOC 2®) Type 1 and 2 challenging domains. They will have access to tools and accreditations for cybersecurity through an external audit. The technologies that relieve them of routine, repetitive tasks, SOC 2 accreditation provides detailed information about the effectively freeing up their valuable time to focus on innovative controls Schlumberger has implemented in regard to security, solutions. availability, and integrity of the systems the company uses to process customer data as well as the confidentiality and privacy This new way of working is possible only by combining of the information that these systems process. the latest offerings in digital technology with the domain know-how and hardware and software technology leadership By working in the DELFI environment, oil and gas experts will that can optimize workflows, increase the efficiency be able to connect in a different way to complete shared work of operations, and ultimately decrease the cost per barrel.

Schlumberger Software Technology Innovation Center

Schlumberger Software Technology Innovation Center (STIC) was established in 2014 with a goal of leading the oilfield digital transformation by taking advantage of technology trends driven by Silicon Valley companies. The center team consists of a highly technical workforce, including Schlumberger experts and recent university graduates. The technical staff includes cloud and big data engineers, user experience (UX) designers, front-end web developers, data scientists, and machine learning experts.

The primary focus of STIC is to deliver technology proof points—working code that leverages new technology applied to oilfield challenges. The center regularly aligns its priorities with stakeholders from the Schlumberger product lines. STIC is closely connected with the Schlumberger software community, hosting hackathons and design sprints to bring Subsurface expert Sergey Doronichev (left) and Data Scientist Vishakh engineers, stakeholders, and end users together to accelerate Hegde explore the capabilities of virtual reality for the visualization the software-development process. of 3D seismic surveys at the Schlumberger Software Technology Innovation Center in Menlo Park, California. The center maintains affiliations with earth science, computer Over the past three years, STIC has worked with and evaluated science, and computational mathematics departments of more than 400 companies and pursued projects with over Bay Area universities, most notably Stanford. It also partners 70 of them. By working together with partners, we continuously with companies in Silicon Valley to gain knowledge about learn about new capabilities and opportunities while integrating how digital technology and infrastructure are applied in other with the Silicon Valley ecosystem. Through close collaboration industries. STIC has become a focal point for Schlumberger to with these digital technology partners, Schlumberger is able to communicate its digital vision with customers, with the center develop digital technology solutions in less time, thus reducing frequently hosting meetings and workshops that provide in- the development lead time. This is our new way of working for depth technical engagement. technology development.

14781schD2R3.nar.indd 10 2/13/18 11:19 PM Reduce Uncertainty, Accelerate Decision Making

The first step in the E&P development process is to create a digital representation of what is hidden below the Earth’s surface. To accomplish that, measurements and data from multiple sources are combined to create a model of the subsurface. Experts from multiple technical domains—geology, geophysics, and petrophysics as well as reservoir, drilling, and production engineering—use their knowledge to further refine the model. This initial combination of measurements and data, along with expert interpretation, are fundamental to some of the most critical decisions about the reservoir—decisions that will affect its entire life cycle.

The Petrel E&P software platform, which has become an industry standard and was introduced in 2003, is also now available in the DELFI environment. The Petrel platform uses a shared-earth approach that enables standardized workflows from exploration to production. Every decision is an informed one that is made with a clear understanding of both opportunities and risks.

Repeatable and automated workflows enable users to capture best practices and share them throughout the organization. Petrotechnical experts and asset teams can analyze, interpret, and model the subsurface in real time in a highly collaborative manner. All of this works together to decrease uncertainty and Geoscientists review petrophysical measurements and 3D seismic data in the accelerate the decision-making process, thereby accelerating Petrel E&P platform to improve modeling of a complex formation. the time to first oil.

Numerous applications are also available in the DELFI Increase Efficiency, Minimize Risks environment for access as required. The Techlog* wellbore software platform for the analysis and validation of wellbore The software and systems used to drill and complete a well are data, the ECLIPSE* industry-reference reservoir simulator, some of the most complex technologies in the world, crucial and INTERSECT* high-resolution reservoir simulator for to making both the few major development decisions and the accurate, efficient simulation of reservoir behavior over time millions of small but critical ones that are made daily. Every well are just a few examples. Having global access to applications, drilled comes with a unique set of conditions that also vary during instead of the conventional siloed approach, further helps the construction process. The DrillPlan digital well construction to optimize field development plans and facilities design. planning solution is the first cloud-native application to be launched in the DELFI cognitive E&P environment, providing Working in the cloud within the DELFI environment also a radically new way of working to deliver higher-quality drilling enables users to take advantage of high performance computing programs faster. This is achieved through the automation of to process large volumes of data during the construction and repetitive tasks and validation of end-to-end workflows to ensure maintenance of evergreen reservoir models. This includes that the entire plan is coherent. higher-resolution seismic data, wireline logging of wells, and the testing and characterization of reservoir fluids. Key The DrillPlan solution employs an iterative workflow. As new data benefits to working in the cloud environment are fast access to is added, the plans improve and future programs can learn from data visualization, interpretation, and application to refine the prior experience. This iterative process also improves planning model during different phases of the E&P life cycle. efficiency because any changes to the plan, such as recalculating

14781schD2R3.nar.indd 11 2/13/18 11:19 PM the path that the well should follow, can be completed in minutes Teams empowers new levels of collaboration among teams and rather than days. The DrillPlan solution in the DELFI environment stakeholders, significantly improving productivity. enables seamless collaboration between experts, from the geologist to the drilling engineer and production engineer. After more than a year of testing by oil and gas companies in the United States and Canada, the DrillPlan solution has proved to be The resulting digital drilling plan integrates activities, processes, comprehensive and powerful, delivering well planning programs in and people, placing the right information in the right hands at days rather than weeks. The DrillPlan solution has been available the right time. The DrillPlan solution also monitors deviations in North America land operations since the fourth quarter from the original plan for continuous improvement via machine of 2017, and Schlumberger continues to develop its functionalities learning. When domain experts make dynamic changes to to meet the needs of the global exploration and development market the plan, the software immediately updates the shared-earth in 2018 and beyond. model, which also augments learning for the next well plan. By automating repetitive tasks, domain experts have more time to In a future that requires increasing production to meet global use their advanced skills to create new insights. The result is a demand for oil and gas resources, the Schlumberger goal is to drilling program that maximizes accuracy, efficiency, and value reduce the planning process from weeks to days. The digital way of at the same time as minimizing risks. working, such as the DrillPlan solution in the DELFI environment, facilitates that goal by enabling iterative collaboration among The DrillPlan solution leverages the digital technologies of the team members working on the latest model. This is one example Microsoft Azure and the Azure Stack hybrid cloud solution. of how Schlumberger is using digital technology to improve Interoperability with Microsoft Office 365 and Microsoft collaboration within the industry. “The DrillPlan solution has proved to be comprehensive and powerful, delivering well planning programs in days rather than weeks.”

Schlumberger Limited Industrial Internet Center

Located in Sugar Land, Texas, the Schlumberger Limited Industrial Internet Center focuses on architecture and infrastructure development for the cloud, data, industrial Internet of things (IoT), automation, and cybersecurity across multiple platforms. Established in 2016, the center comprises experienced IoT professionals with knowledge of other industries, recent graduates, and personnel from other Schlumberger hardware and software technology centers.

Today, consumer technologies that tap into the IoT include products such as wearable health monitors and smart home appliances. This gives us the ability to connect different types of devices, gather relevant data, and apply analytical techniques to gain valuable insights.

Adopting the IoT in the E&P industry, however, presents Internet of Things Production Systems Engineer Miguel Lopez and several unique challenges. First, there is the nature of oil Automation Engineer Mona El Hares inspect a scanner device used in and gas equipment as well as the broad global footprint of an application at the Schlumberger Limited Industrial Internet Center where these operations occur. Then there is the need for data in Sugar Land, Texas. integrity and the highest level of cybersecurity. teams around the globe to establish the infrastructure for a Based on a thorough understanding of equipment design, scalable, accessible, and flexible data store—where all the performance factors, and domain use, the center’s team data is shared in a common ecosystem—to enable improved of experts collaborates with other Schlumberger software business intelligence.

14781schD2R3.nar.indd 12 2/13/18 11:19 PM Decrease Cost per Barrel The goal of the TLM organization is to reduce the TCO of every asset while providing the most reliable tools and equipment to Schlumberger is committed to technology and processes that field operations in a timely manner. Monitoring and surveillance enhance efficiency and decrease the cost per barrel. An ongoing use software engines and data science to improve operations consideration is that about 85% of the total cost of ownership reliability and efficiency, which together improve our customers’ (TCO) of tools and equipment accumulates from the moment performance. they are deployed until the day they are retired. Therefore, improving the management of assets throughout their life cycle One example of how Schlumberger is using TLM to improve is a primary concern for Schlumberger and its customers. asset utilization and reduce TCO is in the deployment of OneStimSM products and services on land in North America The extent of the Schlumberger global footprint provides for unconventional reservoir completions. Fracturing fleets the scale to take on any size project and the reach to quickly are akin to a high-volume factory where each fleet consists respond to customer needs in any corner of the world. of more than 40 pieces of equipment and 4,000 replaceable To properly maintain the global fleet of assets that is the basis components to be maintained on location by a team of 11 of these capabilities, Schlumberger relies on its Technology crew members. Each well requires four to seven million Lifecycle Management (TLM) organization. The organization pounds of sand, which is transported as 140 truckloads acts as a bridge between Engineering and Manufacturing and or in 35 railroad cars. The equipment and personnel field operations. The TLM organization uses industry-leading at a fracturing operation are part of a changing worksite maintenance processes and ensures that sustaining activities environment that needs to move and scale in size for a new location are aligned with the specific demands that vary among every few weeks. GeoMarket regions.

A maintenance supervisor at the Denton Center of Reliability and Efficiency in Texas oversees remote hydraulic fracturing operations.

Current Mission X Identifying Regions

Pattern Identified

Active Drone Feed

Pattern Identified

Height 291 RPMs 8020

Ambnient Temp 85°

Pattern Identified

A semiautonomous drone hovering over a hydraulic fracturing fleet scans objects to detect fluid levels on equipment that is difficult to access.

14781schD2R3.nar.indd 13 2/13/18 11:19 PM Schlumberger manages all of this through distribution control This type of predictive health monitoring applied to automatic towers and global equipment traceability that tap into streamlined surveillance further improves equipment reliability. digital supply chain capabilities. Vertical integration of the supply Rather than waiting to resolve an offline pump, Schlumberger chain adds another dimension through the ability to balance, for can now shorten the time it is offline by performing what instance, our internal supply of sand against external suppliers. is needed to keep it running efficiently.

Since 2014, these processes have generated approximately 10% Another aspect of TLM is a suite of maintenance applications of year-on-year savings in both capital expenditures and that are part of the Schlumberger Maintenance Tool maintenance costs. This represents only one example of how Ecosystem. For example, at a fracturing wellsite in North digitizing planning and logistics across all functions and product America land, two shifts of crew members perform lines can improve efficiency and lower the cost per barrel. thousands of checks per day. Historically, all the data was recorded by hand. Today, using a highly visual mobile app, maintenance During hydraulic fracturing operations, different types of sensors crew members can perform these checks with significant placed on the high-pressure pumps enable Schlumberger to improvement in their productivity. use data analytics to predict the onset of major component failures before they occur. The data is collected by a remote Data from the mobile app is shared in the cloud along monitoring center where experts alert field personnel with information from equipment sensors, remote monitoring to remove a pump from operations and perform the necessary sites, and maintenance centers. Inventory tracking and reliability maintenance before it fails, which significantly reduces data also feed into the cloud to facilitate predictive health maintenance costs as well as the need for backup equipment maintenance. This ecosystem was deployed globally in 2017 for on location. Well Services but is also being used in other product lines.

Schlumberger-Doll Research Center

Schlumberger has always held the conviction that research is an investment in its future and an essential part of the company’s culture. The first Schlumberger research laboratory, founded in 1948 in Ridgefield, Connecticut, focused on a scientific research program assembled by scientist Henri-Georges Doll. The objective of the program was to invent new subsurface measurements that would expand the growing Schlumberger wireline business.

In 1967, the laboratory was renamed the Schlumberger-Doll Research Center in honor of Henri-Georges, who was then the retiring chairman and had been the foremost technical contributor at Schlumberger. In 2007, the center moved to a new facility in Cambridge, Massachusetts, to be closer to a major research hub, including world-renowned universities such as the Massachusetts Institute of Technology (MIT) and Harvard University. Roboticist Anastasia Mavrommati, Research Scientist Gavin Strunk, and Intelligent Manipulation Program Manager Chris Bogath In January 2017, the Schlumberger-Doll Research Center implement path planning and grasping software changes in a flexible added a robotics department that leverages digital manufacturing demonstrator at the Schlumberger-Doll Research technologies to address the challenges of oilfield operations— Center in Cambridge, Massachusetts. from subsea and surface to flexible manufacturing. The rise of robotics and artificial intelligence has sparked The Schlumberger robotics department works closely with a remarkable industrial transformation, and adopting the use academic institutions in Boston and industrial partners around of robotics in the oil and gas industry provides another opportunity the globe to adapt emerging robotics technology, such as to reduce operational costs while further improving service perception, reasoning, communication, and manipulation, to quality and safety. enable system automation for oilfield applications.

14781schD2R3.nar.indd 14 2/13/18 11:19 PM OneSubsea Pore to Process Optimization

One of the greatest challenges in deepwater oil and gas developments is controlling cost. Digital technology holds the promise of enabling domain experts to detect different ways to reduce cost when designing a subsea system from pore to process. One example could be a reduction in capital expenditure by redesigning the subsea architecture or the topside production system.

OneSubsea Capital-Efficient Solutions extend market-leading subsea boosting technology and are now an integral part of all customer projects. Capital-Efficient Solutions have reduced the average lead times of subsea products by more than 50%, saving up to 60% in project costs. As a portfolio of standardized designs that leverages streamlined engineering and manufacturing processes, OneSubsea delivers integrated subsea production systems that reduce project cycle time and overall cost.

At OneSubsea, early engagement with customers is essential to determine the best way to develop a field. Historically, this early engagement process can last from four to six months. During this time, OneSubsea and customer expert teams study the reservoir, looking closely at its expected flow dynamics, to answer specific questions. The new planning software that Schlumberger is currently developing and testing with customers will shorten the time it takes to obtain viable answers to all the questions that must be answered in the design of subsea development projects. Components of a multiphase compressor for subsea processing applications are loaded onto a vessel in Horsøy, Norway, for delivery to an oil and gas field in the North Sea. OneSubsea Capital-Efficient Our integrated teams of experts employ digital technology to Solutions deliver integrated subsea production systems that reduce explore multiple scenarios. To reduce the risks associated with project cycle time and overall cost. complicated subsea developments, the teams need to explore as many scenarios as possible. However, the traditional Over time, monitoring services for subsea equipment have approach to development entails collecting data from the expanded to include production monitoring, such as real- customer that is used to iterate different concepts on paper time flow assurance consulting to optimize field production. for the field’s design. When this work takes place in a digital Using software such as the PIPESIM* steady-state environment, multiple scenarios can be assessed in less time, multiphase flow simulator and OLGA* dynamic multiphase which ultimately helps to accelerate the time to first oil. flow simulator—both of which are available in the cloud- based DELFI cognitive E&P environment—in combination Having all the pertinent data from different domains in with production chemistry testing and customized advisory one integrated model also facilitates better collaboration services, Schlumberger can provide a complete flow assurance between experts. As the integrated team of experts from the solution for any type of oil and gas operational challenge. customer and OneSubsea moves forward with planning, it will Furthermore, subsea monitoring uses all the data intelligence also benefit from the cognitive abilities of this new subsea available from an operation to enable future intelligent design planning software. and manufacturing for new developments.

14781schD2R3.nar.indd 15 2/13/18 11:19 PM Digitally Enable End-to-End Solutions

It is time for the E&P industry to do something it has never integration drives a leading portfolio of pore to pipeline done before to achieve a genuine step change in performance. products and services. We speak our customers’ language, and It needs to rise above historical attempts to make incremental we are committed to developing the technology and aligning improvements and instead completely redesign the workflows the business models they need to overcome the challenges and redefine the work itself with a clear focus on efficiency they face. and consistency. This requires deep domain knowledge and operational experience that Schlumberger possesses in Schlumberger leadership in hardware, software, and domain understanding how workflows can be improved to create a more expertise has enabled our customers to gain access to new efficient pathway to lowering the cost per barrel. reserves, increase reservoir recovery and production, and maximize their returns. Digital technology enablement Technology is the fulcrum on which the oilfield services represents a new dimension that unlocks further value for industry turns. The Schlumberger focus on technology Schlumberger and its stakeholders.

The adoption of digital technology improves the speed at which field personnel have access to critical information during operations. For example, OneSurface engineers using handheld devices will be informed of live flow events from inside hydrocarbon processing plants, enabling them to take immediate action to maintain system health status.

14781schD2R4.nar.indd 16 2/14/18 3:06 PM 2017 Form 10-K Schlumberger Limited

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14781schD2R3.nar.indd 18 2/13/18 11:19 PM Board of Directors Corporate Officers

14781schD1R2.indd 2 2/14/18 5:18 PM Schlumberger Limited

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